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Caterpillar is riding the AI momentum as more companies need its construction equipment and power-generation solutions.
Microsoft's cloud platform continues to gain market share, and AI should accelerate growth.
Walmart has economies of scale that few can compete with, and online ads are boosting its margins.
The Dow Jones is the oldest benchmark in the stock market. It was established in 1896, but none of the original 12 companies are still in the index. The index has gone through several changes, with a strong focus on tech stocks in recent changes. However, it is still well diversified across several sectors.
Some investors seek to outperform the Dow Jones by investing in individual stocks that constitute the benchmark. These are some of the top dividend stocks in the Dow Jones that can deliver enticing long-term returns.
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Caterpillar (NYSE: CAT) has been a leader in construction for over 100 years. The company has endured many boom and bust cycles, but strong artificial intelligence (AI) demand should power the stock to all-time highs.
Energy and transportation revenue surged by 17% year over year in the third quarter of 2025, contributing to Caterpillar's 10% overall revenue growth. Caterpillar CEO Joe Creed told investors that the company had a growing backlog, as it supplies the necessary power generation solutions for AI data centers. The company also provides the necessary equipment for building data centers.
Shares are up by 70% over the past year and have more than tripled over the past five years. Caterpillar stock currently has a 1% dividend yield.
Microsoft (NASDAQ: MSFT) has been one of the best dividend stocks to buy and hold. While its dividend yield of 0.75% may appear inadequate, the stock has appreciated by 16% annually on average over the past five years, indicating that its dividend has been growing steadily. Looking ahead, Microsoft is expanding into multiple high-growth industries, with cloud computing playing a crucial role in driving revenue growth.
Microsoft's Azure platform is one of the big three cloud computing giants, alongside Amazon and Alphabet. There are other cloud providers as well, but those three gobble up most of the market share.
The tech giant's cloud revenue increased by 26% year over year and should continue to accelerate thanks to AI. The continued development of software AI and the emergence of physical AI can significantly boost demand for cloud platforms and help Microsoft continue to outperform the Dow Jones.
Walmart (NASDAQ: WMT) is another top dividend stock that offers reliable cash flow for investors. The global retailer has more than 10,000 locations and has an immense competitive advantage over other retail companies.
Walmart's size gives it access to some of the lowest prices on various products and services, which lets it set lower prices for its products than local rivals. Walmart's vast number of stores also operates as a logistics chain, making it easy to conduct same-day shipping while trimming shipping costs.
Walmart's 5.8% year-over-year revenue growth underpins the company's status as a leading retailer. Its soaring online advertising revenue also sets the stage for long-term profit margin expansion and potentially higher dividend hikes in the future.
Before you buy stock in Caterpillar, consider this:
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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